HomeMy WebLinkAboutR-2005-21 automated meter reading project
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RESOLUTION NO. 2005-" \
RESOLUTION DECLARING INTENTION TO REIMBURSE CERTAIN EXPENDITURES WITH BORROWING
PROCEEDS
WHEREAS, the City of La Porte, Texas (the "Issuer") desires to pay expenditures in connection with the design, planning,
acquisition, construction, equipping, andlor renovating the project or facilities described as the Automated Meter
Reading project (the "Project").
WHEREAS, Article 717k-6, Vernon's Texas Civil Statutes, as amended ("Article 717k-6"), permits the Issuer to use the
proceeds of debt issuance to reimburse the Issuer for costs attributable to the Project paid or incurred before the date of
issuance of such debt issuance; and
WHEREAS, the Issuer finds, considers, and declares that the reimbursement of the Issuer for the payment of such
expenditures wil1 be appropriate and consistent with the objectives of the Issuer's programs and, as such, chooses to
declare its intention, in accordance with the provisions of Section 1.150-2 of the Treasury Regulations, to reimburse itself
for such payments at such time as it issues debt to finance the Project.
NOW, THERFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS THAT:
Section I. This Resolution declares the intent of the Issuer to reimburse the expenditures for the Project with the
proceeds of debt issuance. The Issuer presently intends to reimburse the expenditure by incurring debt issued under Texas
law, the interest on which is excludable from gross income under Section 103 of the Internal Revenue Code of 1986, as
amended.
Section 2. The Issuer reasonably expects to incur debt with a maximum principal of $2,625,000 for the purpose of
paying the costs of the Project.
Section 3. The Issuer intends to reimburse the expenditures hereunder not later than 18 months after the date of the
original expenditure is paid or the date the Project is placed in service or abandoned, but in no event more than three years
after the original expenditure is paid unless the Project is a construction project for which the Issuer and a licensed
architect or engineer have certified that at least five years are necessary to complete the Project in which event the
maximum reimbursement period is five years after the date of the original expenditure.
Section 4. The Issuer intends that this Resolution satisfy the official intent requirement set forth in Section 1.150-2
of the Treasury Regulations and evidences its intentions under Article 717k-6.
Section 5. This resolution shaH be liberal1y construed to evidence the intent of the Issuer to comply with state law
and federal income tax law in the issuance of tax-exempt obligations for the Project.
PASSED AND APPROVED this the 24th day of October 2005.
CITY OF LA PORTE, TEXAS
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Alton Porter, Mayor
A ITEST
APPROVED:
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City Secretary
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City ttomey
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REQUEST FOR CITY COUNCIL AGENDA ITEM
Requested By:
Aoorooriation
Agenda Date Requested:
Source of Funds: N/A
Department: FINANCE
Account Number: N/A
Report:
Resolution: XX Ordinance:
Amount Budgeted:
Exhibits:
Resolution 2005-
Amount Requested:
N/A
Exhibits:
Budgeted Item:
Exhibits:
SUMMARY & RECOMMENDATION
The City of La Porte intends to finance the following project:
Automated Meter Reading
up to $ 2,625,000
We are moving forward with the implementation phase, we recommend the City Council
approve a resolution that allows the City to reimburse itself from future debt proceeds for
expenditures that are made prior to the issuance of the debt. This is a position that we have taken
on several other projects in the past as recommended by bond counsel and required by federal
law.
The attached resolutions give us the option to reimburse ourselves from future proceeds from
debt funding for certain costs associated with the above-mentioned projects.
This action will allow the City to reimburse the Utility Fund to improve its financial condition as
we have been drawing down the fund balance.
Recall that during last year's budget discussions we noted that this year Council would be
presented with a new utility rate model, with proposed increases, for your consideration.
Action Required bv Council: Approve resolutions declaring intention to reimburse certain
expenditures with borrowing proceeds.
Approved for Citv Council A2enda
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Date ( I